WB "Global Economy -5.2% This Year... A Sobering Outlook" (Comprehensive)

David Malpass, President of the World Bank
Photo by AP Yonhap News

[Asia Economy New York=Correspondent Baek Jong-min] The World Bank (WB) on the 8th (local time) downgraded its global economic growth forecast for this year to -5.2% due to the impact of the COVID-19 pandemic. As this is the most recent analysis reflecting the effects of COVID-19, it is seen as indicating that the current economic outlook has worsened compared to the early stages of the outbreak.

The WB releases annual economic forecasts twice a year, in January and June. This announcement is the first to incorporate the impact of COVID-19. Accordingly, the global growth forecast has dropped by a staggering 7.7 percentage points from the January forecast (2.5%). Next year's growth rate is estimated at 4.2%.

The WB explained that this represents the worst recession since World War II and is about three times steeper than the 2009 global financial crisis.

The WB stated, "Countries hardest hit by the pandemic are those most severely affected, especially those heavily dependent on trade, tourism, commodity exports, and external finance." Aihan Kose, WB's Chief Economist for forecasts, said the scale of the decline in this forecast is the fastest and steepest on record.

Major foreign media also noted that the WB's forecast, following the International Monetary Fund (IMF)'s world economic outlook report in April, shows that the economic impact of COVID-19 has worsened further in just over two months. The IMF had predicted a global growth rate of -3.0%, down 6.3 percentage points from its January forecast (3.3%) in that report.

The impact of COVID-19 is expected to hit advanced economies harder than emerging markets. Advanced economies are forecast to shrink by -7.0%, down 8.4 percentage points from the January forecast (1.4%), while emerging and developing economies are expected to grow by -2.5%, down 6.6 percentage points from January (4.1%). One foreign media outlet noted that this is the first time since the 1960s that emerging markets have been forecast to experience negative growth.

Growth forecasts for major advanced economies are: the United States -6.1%, Eurozone -9.1%, and Japan -6.1%. For emerging and developing economies, China is expected to grow by 1.0%, Russia to contract by -6.0%, Brazil by -8.0%, and India by -3.2%. South Korea's forecast was not released.

By region, East Asia and the Pacific, including China and Korea, are expected to grow by 0.5%, while all other regions are forecast to experience negative growth.

The WB also mentioned that in the worst-case scenario, the global economy could contract by 8.0% this year and grow by 1% next year.

World Bank Vice President Sayla Pazarbasioglu said, "This is a sobering forecast," adding, "This crisis is likely to leave long-lasting scars and pose significant challenges worldwide."

This content was produced with the assistance of AI translation services.